Justice Department investigating VW diesel scandal

Volkswagen is already in hot water with the Environmental Protection Agency for manipulating its diesel-powered vehicles to comply with clean air regulations, and now the company could be facing criminal charges from the U.S. Justice Department.

According to Bloomberg, the U.S. Justice Department is currently conducting a criminal investigation into VW’s use of a software cheat that allowed its so-called clean diesel models to pass the EPA’s clean air standards. VW has admitted that it fitted some of its diesel models with a software code that allowed the vehicle to run cleaner when it detected that it was on an EPA testing cycle. During real world driving, those supposedly clean vehicles emitted up to 40 times the pollutants allowed under the EPA’s rules.

It’s possible that the Justice Department’s investigation could ultimately lead to jail time for some VW executives. The company is already facing a maximum fine of $18 billion from federal regulators.

So far no recall has been issued for the nearly 500,000 TDI vehicles sold in America with the embedded cheat software, but one is certainly coming. VW will also have to face lawsuits from disgruntled owners.

VW’s stock price was hit hard by the scandal during Monday trading, falling by as much as 23 percent and erasing more than $17 billion of the company’s paper value.